THE INFLUENCE OF ACCOUNTING INFORMATIONAL RELEVANCE TOWARDS THE SENSITIVITY OF EFFICIENT CAPITAL INVESTMENT
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Prior research shows that accounting information quality is positively related to investment efficiency. The purpose of this paper is to study the relationship between accounting information quality and investment efficiency in Indonesia. Based on Dechow and Dichev’s (2002) earnings quality measure, I expect that the investment efficiency is stronger when firms have higher earnings quality. Research conducted on 90 listed manufactured companies in Indonesia Stock Exchange, selected through purposive sampling technique that is consistent with the criteria listed there since 2006 until 2010, and also has a comprehensive financial reporting data. The evidence is consistent with the hypothesis that high accounting quality provides more investment efficiency.